As Waistlines Grow, So Does Taxpayer Spending on Weight-Loss Surgery

This article is the second of an occasional series on the consequences of state efforts to curb spiraling health costs, and the dollars lawmakers might target in the future. 

As the ranks of the obese in Texas have swelled, so too has state and federal lawmakers’ comfort with forking over taxpayer dollars for weight-loss surgery for the elderly and the indigent.

A Texas Tribune analysis of federal and state health care expenditures shows Medicare spending for weight-loss surgeries for Texas seniors — everything from gastric bypass to gastric banding — grew by nearly 400 percent between 2006 and 2010, from $340,000 to $1.7 million. Since 2009, the number of bariatric procedures covered by Medicaid, the state health provider for the disabled, children and the very poor, has more than doubled. And annual Medicaid spending has jumped from $290,000 to $2.7 million in the last three years, the bulk of which was supplemental payments made to managed care plans responding to the surge.  

Nowhere has this state-subsidized weight-loss surgery been more pronounced than in Hidalgo County along the Texas-Mexico border, where, according to Medicaid records, doctors have been reimbursed for 443 weight-loss surgeries in the last five years, to the tune of more than $340,000. That is dozens more procedures — and more than twice the cost — than in Dallas County, which has nearly 150,000 more people on Medicaid than Hidalgo County.

Border surgeons say that Medicaid patients are not their meal ticket and that they are simply responding to demand: Their region has the highest rate of Medicaid patients in the state, and patients roll into the medical hubs of McAllen and Edinburg from across southern Texas.

“There is no single diet right now that helps patients lose weight and keep it off,” said Dr. Luis Reyes, a McAllen bariatric surgeon who has filed nearly 300 Medicare and Medicaid claims combined for weight-loss surgeries over the last six years and netted about $220,000 for them, according to state and federal data. “Bariatric surgery has been able to help these patients to lose weight, to keep it off and to get rid of their comorbidities, which are very expensive.” 

Interactive: Measuring Taxpayer-funded Weight-loss Surgeries in Texas

And Medicare and Medicaid officials say Texas’ overall numbers track with a state in which nearly two-thirds of adults and one-third of teenagers are either obese or overweight. Stephanie Goodman, spokeswoman for Texas’ Health and Human Services Commission (HHSC), said there is a higher incidence of diabetes along the border, “so that may be why we’re seeing more of these surgeries in that region.”

But state lawmakers, who have set their sights on Medicaid as a way to curb out-of-control health care costs, are troubled by the surgery spending. State Sen. Jane Nelson, R-Flower Mound, who chaired a committee in the 2011 legislative session aimed at cutting Medicaid costs to help close the state’s budget gap, said lawmakers “need to understand why we are seeing such a prevalence of these surgeries, especially in light of the rampant abuse of the system across the state.”

State Sen. Dan Patrick, R-Houston, said that in light of the Tribune’s analysis, he has asked HHSC's inspector general to review the state’s bariatric surgery policy to “ensure that any opportunities for fraud, waste or abuse are eliminated.”

Covering weight-loss surgery under state and federal health plans is a relatively new concept. Medicare, the federal plan for the elderly, started doing it in 2006; Medicaid, the joint state-federal health plan for the disabled, children and the very poor, covered it only on a case-by-case basis until opening it up in 2009.

While Medicare spending on bariatric surgeries in Texas has marched up steadily, Medicaid has seen a dramatic spike — the result of the state making supplemental payments to managed care plans, which get paid set premiums and faced unanticipated costs due to the state’s decision to more widely cover weight-loss surgery. Those payments, which, at a cost of $23,000 per surgery, reached $2.3 million in 2011, ended last year, creating significant cost savings for the state.

Both Medicare and Medicaid require potential bariatric patients to meet what is designed to be a high bar. Patients must have a body mass index (BMI) of at least 35, which is 210 pounds for someone who is 5-foot-5, and 245 pounds for someone who is 5-foot-10. They must have other comorbidities related to obesity, from sleep apnea to high blood pressure, and must have attempted and failed other weight-loss regimens. Medicaid even covers teenagers, though they must have a BMI of at least 40 and go through a special review. (Just four were covered in 2009, compared with 18 in 2011.)

Dr. Ernesto Garza Jr., a McAllen bariatric surgeon, said that as the medical field and patients themselves have become more comfortable with weight-loss surgery, Medicare and Medicaid have followed suit.

While it used to take three to four months for Medicare to approve a surgery, he said, now it takes three to four weeks. Though Medicaid requires evidence that patients have secondary health conditions, he said, problems like joint pain, reflux and incontinence can qualify. “It’s not really hard to find these issues,” Garza said, adding that 30 to 40 percent of the bariatric surgeries he performs are covered by Medicaid or Medicare, and that his patients live healthier, more productive lives post-surgery. “You just have to ask the right questions.”

State and federal health officials say the funding for weight-loss surgeries has been a good investment. HHSC's Goodman said when they are used appropriately, they curb Medicaid costs. “That’s because we reduce the number of expensive medications and treatments that are needed for the health conditions associated with obesity,” she said.

Dr. Erik Wilson, the medical director for bariatric surgery at Memorial Hermann-Texas Medical Center in Houston, said that once someone reaches a BMI over 30, the likelihood of that person being able to lose weight and keep it off plummets. Between 18 months and three years after a bariatric surgery, he said, the procedure has paid for itself. “It’s a concept the public has a hard time getting its arms around,” he said, “but it really is the best option for a lot of these patients.”

Not everyone agrees it is the best long-term approach for Texans’ expanding waistlines, or the state’s budget woes.

State Sen. Bob Deuell, R-Greenville and a family physician, said that when Texas decided to start covering bariatric surgery under Medicaid, health officials assured lawmakers it would only be used in extreme cases. Deuell said it appears that threshold is not hard to meet. 

“I have a lot of angst about Medicaid patients getting it, about any patients getting it,” he said. “I think it’s being approved too often.” 

Daniel O’Connor, an associate professor in the University of Houston’s department of health and human performance, said that although weight-loss surgery has clear benefits for individual patients, it is not a sustainable public health intervention. O’Connor said the state could reach many more people with less expensive lifestyle interventions, and improve their health enough to save far more dollars than bariatric surgeries do. 

“We need to determine what model we should use on a gross level, not a patient-by-patient level,” he said. “We might be able to make them better enough with non-surgical interventions that there’s still a significant health care saving to the state.”

Data reporter Becca Aaronson contributed to this report.